To Spend Less, Simply Invest More

(This column was first published on Value Research India.)

The past two weeks have been extremely hectic. No, not because there was too much work; but because all major malls and minor shops have mega sales going on. I’m sure all the men who are reading this would understand the agony of their brethren. I’m also sure that the only men who like the sale season are the ones who own the shops and businesses that run the sales. For the rest of us, sales mean jostling for space in crowded areas, digging through heaps of fabrics to look for the desired size or colour and endless waiting outside trial rooms to give suggestions that are never considered.

The other thing that sales mean is holes in our pockets. The rationale behind shopping during sales is that you save money because you can buy things at discounted prices. However, very often you also end up spending a lot more because you end up buying more than what you actually need. We buy on impulse, and not only women, but men as well. Sales seduce you into buying a few things more, because they’re available cheap. And ironically, this makes you feel wise as well.

But then, that’s human nature. We end up buying more than what we need, not only during sales, but otherwise as well. We’re hoarders, we love having various items in our possession. We might not need all of them, we might look for excuses to use them, but we love having them with us. Be it clothes, footwear, gadgets, accessories or even mutual funds, we believe in the “the more the merrier” adage.

The good news is that there’s a way to make sure you spend less or spend only as much as you need. How? By saving and investing. The trick is to get money out of your spending framework. Work out a monthly budget for your basic requirements and necessities. Maybe, work out a budget for your entertainment and shopping and other frivolous needs. The money that is then left should be invested. You can invest this surplus money into stocks or funds or fixed deposits or recurring deposits or pension plans or whatever you’re comfortable with. What’s important is that it doesn’t stay in your bank account. Once you don’t have instant access to it, you won’t be able to spend it. As easy as that!

Of course, this idea won’t work if you’re into the habit of swiping your credit card everywhere you go. The solution for that would be to leave your credit cards in a drawer and take them out only in case of emergencies. In case of debit cards and cash, you’ll be able to spend only what’s there in your savings account or wallet. So just make sure there isn’t much there. Money sitting idle gets spent, while money that’s invested works hard to make more money. Not a tough choice to make.

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